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Published May 27, 2021

State of Play: Supply Chain & Logistics — with Hamid Moghadam

Discover the pivotal role of logistics and leadership with insights from Hamid Moghadam, CEO of Prologis, as he delves into the future of warehousing and supply chain resilience amidst e-commerce shifts, while Scott Galloway examines augmented reality's impact on retail innovation.
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  • Supply Chain

    The modern supply chain has evolved from a mere cost center to a critical component of business strategy. highlights how unexpected disruptions, like COVID-19 and geopolitical events, have brought supply chains to the forefront of corporate priorities 1. The rise of e-commerce has further complicated supply chain dynamics, demanding faster service levels and diverse product choices 1. emphasizes the importance of mapping out the entire supply chain to identify opportunities for innovation and efficiency 2.

    Supply chain has come from the bowels of corporate America in the last couple of years into the forefront.

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    This shift has transformed logistics into a key driver of shareholder value, as seen in companies like Amazon and Apple 2.

       

    Resilience

    Post-COVID, the focus of logistics has shifted from efficiency to resilience. observes that businesses are now prioritizing inventory management to prepare for unforeseen disruptions, moving from a "just in time" to a "just in case" approach 3. This change reflects a broader trend where e-commerce penetration continues to grow, even among demographics previously resistant to online shopping 3.

    Logistics is going to be more about resilience and less about efficiency.

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    Additionally, Moghadam notes the importance of measuring employee output rather than input, a practice that has gained traction due to remote work trends 3.

       

    Efficiency

    The role of logistics in operational efficiency is increasingly vital as consumer demands evolve. explains that e-commerce requires more labor and space in warehouses compared to traditional retail channels 4. This shift from pallets to parcels necessitates significant changes in warehouse operations, including handling returns and managing increased packaging needs 4.

    If it takes one unit of warehouse space, the same headphone going through e-commerce channel takes three units of warehouse space.

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    The dominance of players like Amazon has further impacted the supply chain, creating both challenges and opportunities for logistics companies like Prologis 4.

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